Static Main Menu

What are the Four Levels of Globalization?

Article shared by :

ADVERTISEMENTS:

The four levels of Globalization are: (1) Globalisation of a particular company (2) Globalisation of a particular industry (3) Globalisation at the particular country level (4) Globalisation at the world level!

At a macro level, the countries and the world trade are globalising; at the micro level, the individual companies, particularly industries are globalising.

ADVERTISEMENTS:

On a similar note, few of the Indian families are going global. Parents in Bangalore, son serving in USA and daughter in UK. This is recent phenomena, and similar things are happening in commercial areas.

(1) Globalisation of a particular company:

Large companies expand their trade overseas and even revenues, increase assets base. There will be flow of capital, goods and know-how across different units of the company. Different products, sub-assemblies are manufactured in specialised units and assembled in a factory which is near the end user.

This is particularly true in computer hardware industry like IBM, Hewlett-Packard, Microsoft, and Compaq who have joint ventures, own factories in Asia, Europe and USA. Similarly Auto majors have their plants in different parts of the globe.

(2) Globalisation of a particular industry:

Few industries have captured the global market in a particular segment. The more global the industry the more competitive it is in costs, leveraging state of art technologies, brand name, manufacturing volumes and capital outlays dominate the markets. Clear examples are global pharmacy industries who take advantage of their research base, R&D work and patents. The other examples are athletic goods like Nike, Reebok and Adidas.

(3) Globalisation at the particular country level:

ADVERTISEMENTS:

The key point here is that the level of the export and import of a particular country is measured as percentage of GDP of the country. It refers to the interlink age between economy of the country and world economy. Percentage in terms of exports and imports give the trends. Mere figures of imports or exports will be misleading.

(4) Globalisation at the world level:

Cross border flow of capital, goods, services and technology are an order of the day. The economic interdependence is increasing. Trade figures are significantly higher than the world output. World share of exports in the world GDP is growing.

The percentage was 6% in 1950 and the same was 23 per cent in 1998. World GDP is growing at a steady rate of around 3.2 per cent whereas trade has been growing at rate of 6.2 per cent in last three decades. Trading in foreign exchange is on the increase due to globalisation.

The foreign investments are growing in the areas of assets, stocks and bonds. In the last one decade, globalisation of finance is rapid and is also has quick returns. The globalisation of finance includes shares or stocks, bonds, mutual funds, global depository receipts, bank loans and derivatives. Fund movements are now rarely associated with movement of goods. The funds flow to developing countries is lower as compared to finances due to lower rates of return.